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With no buyers in sight, lenders aim to liquidate Sparrows Point

RG Steel lost more than $440 million in the last year, court papers reveal.

sparrows point last year

Sparrows Point pictured last year, after it was reactivated by now bankrupt RG Steel.

Photo by: Mark Reutter

UPDATE: Providing slightly more breathing space for the bankrupt steel company, RG Steel and its lenders agreed late today to demands by a creditors’ committee to extend the sale of company assets from July 27 to a “drop dead” date of August 24.

Financing by the lenders will be extended from early August to August 24 if a solid bid comes forward by the end of July.

The lenders of bankrupt RG Steel are planning to liquidate Sparrows Point and other company facilities under a 10-week sales timetable that will end in early August.

In papers filed in U.S. Bankruptcy Court in Delaware yesterday, Wells Fargo Capital Finance explicitly stated that the lenders have advanced $50 million to the company not to keep operations open, but only to fulfill existing customer orders, followed by a “liquidation of their assets.”

The lenders’ intentions are a blow to the 2,000 Baltimore steelworkers who have held out hope – encouraged officials of the United Steelworkers union – that Sparrows Point will be rescued by a new buyer and resume steel production.

A year ago, the USW’s top negotiator, David McCall, told Sparrows Point workers not to worry because RG Steel’s owner – billionaire financier Ira Rennert – was not “a fly-by-night operator” who would close, sell or liquidate Sparrows Point.

No Letters of Intent so Far

The bank lenders said the prospects for finding a buyer willing to operate the Sparrows Point mill are dimming.

The same is true for the company’s mostly idled Midwest mills at Wheeling, W.Va., Warren and Steubenville, Ohio, and several other locations.

Despite having 62 groups sign non-disclosure agreements with RG Steel, “none of the potential purchasers has submitted an offer or even a letter of intent for [purchasing] the mills,” according to yesterday’s filing.

While a buyer can still come forward, the likelihood is growing less probable, the lenders argue, because the mills are widely known to be up for sale and RG Steel has been trying to offload them for months.

So far, RG Steel has received just a single offer for a subsidiary, Wheeling Corrugating Co. The filing characterizes that offer from Esmark, Inc. of Pittsburgh as “below the far value of the company.”

Objections from Creditors’ Committee

A creditors’ committee – represented by the USW, Balli Group of London and other unsecured parties – has called on Bankruptcy Judge Kevin J. Carey to extend the length of time in which parties can come forward to bid on the plants.

Currently, the timetable calls for an auction on July 12, with bids opened on July 16 and a sale closed by July 27. The lenders are negotiating a possible compromise with the creditors’ committee that could extend the sale period.

This process is designed not so much to find an operator but to “liquidate [RG Steel’s] assets, in an orderly fashion, without the disruption and damage caused by daily fluctuations and, at times, shortages in cash flow,” according to Wells Fargo.

In other words, the company and its lenders are currently assuming that bidders will buy the idled equipment, property and rights to scrap the mills.

Wells Fargo and other senior lenders, such as GE Capital, are owed about $400 million and have liens on most of RG Steel’s assets. In order to get back their money, the bankers need a quick sales process.

A long list of other businesses and government entities – including Baltimore City and Baltimore County, collectively owed $7.2 million in unpaid water and sewage fees – are unsecured creditors and face little prospect of receiving more than a nominal amount of the debts owed.

More than $400 Million in Operating Losses

The filing also discloses the mammoth losses at RG Steel since the company purchased Sparrows Point and the other mills from Severstal last March.

For the first six months of RG Steel’s existence – from March 31 through October 31, 2011 – the company gushed $323,982,000 in red ink, according to an audited financial statement cited by the Wells Fargo filing.

Because of cash shortages, Sparrows Point’s “L” blast furnace and other facilities were forced to close shortly before Christmas last December.

The furnace was reopened in January after a cash infusion totaling $200 million from Cerberus Capital Management and Renco Group, the owner of RG Steel that, in turn, is controlled by the Rennert family.

Promised Profit Never Happened

When the Baltimore county mill reopened last January, RG Steel President John Goodwin said the company was projected to show an operating profit by April.

Instead, the company lost $119 million between January and April, according to the Wells Fargo filing.

This makes for losses of $443 million (excluding the months of November and December, where no financial data is available) since April 2011.

“In part due to the age and inefficiency of the mills, and in part due to depressed conditions in the steel industry following their acquisition by Renco, the debtors [RG Steel] persistently operated at a loss and consumed capital at an extraordinary rate,” the filing said.

Trying to Sell Mills Since March

In March, RG Steel hired investment banker James Tumulty, who has tried to interest buyers in Sparrows Point and the other mills.

And while a number of groups – including companies based in South America and India and ArcelorMittal in the U.S. – have toured Sparrows Point recently, none have followed through with any interest in buying all or part of the mills, according to Wells Fargo.

As part of the $50 million DIP (debtor-in-possession) financing extended by the banks after RG Steel declared bankruptcy on May 31, the company is obliged to keep within a stringent 10-week budget ending in early August.

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  • ESSEX WATER PARK

    John I am NOT JERRY Just DONT like 9477 for FOR a LOOOONG time They only take care of themselfs and family members and the good old boys and WE ARE NOT PART OF THAT GROUP !! OH I forgot there POCKETS thats what they take care of its all about them  

  • Yourfuture

     A little relief:

    SteelGuu reported today that the USW is praising US President Barack Obama for the signing of a new transportation funding bill.

    This new law will ensure that the federally funded transportation projects are completed using American made iron, steel and manufactured goods.

    “By signing this bill, President Obama shows that he is continuing to stand up for good, middle class jobs and affordable education for all Americans. Rebuilding our transportation infrastructure means we are creating jobs, we are supporting manufacturing, and we are keeping pace with our global competitors.”
    Leo W Gerard USW international president

    • Walter

      This is Great news and our President could not have acted with any better timing for Sparrows Point!
      Why? Because for the big foreign owned ore and steel cartels will now jump on this money wagon because they are going to need a BIG steel mill with a BIG BLAST Furnace with its own seaport to import their ore. More Good News Mr. Foreign investors – we have one of the world’s largest steel complexes on the market for a very reasonable bidding price and its name is SPARROWS POINT!  All buyers are welcome and our mill is the perfect fit for you guys to collect all of those Transportation Federally-Funded Golden Eggs!  Buy the Breast of the East and help us knock off USS and the rest of those American competitors who thought that only they would have their greedy little hands in Transportation Jackpot.  Thank you President Obama – the SP Steelworkers Love you and so does America’s favorite Blast Furnace - the “Beast of the East” – the giant “L” Furnace which lays golden Eggs for America and 21219.  Also many thanks to Maryland Governor O’Malley, the Senator and Congress, and our Leo & Dave & the Local boys for finding a way to save SP and bring jobs back to the Point! Dr. Walter   Phd .BS

  • Bigpapapump

    how come we cant reply to the useless leo and mccall statements

  • MICKEY 111

    WELL….WELL…WELLL…I   GUESS  ITS  OVER  FOR  SP…NO  ONE  WANTS  THE  HEAD ACKS   …UNLESS  THEY  CAN  FIGURE  OUT  A  WAY  TO  FLIP  IT   OR  SCRAP  IT  AND  RE-DEVELOP  IT…5 YR  PROJECT

    • Pointworker

      Mickey, didn’t you read my post?

  • Walter

    Pointworker you know that something is about to break in Sparrow’s favor. This Federal money is timed just prefect to push the big ore & iron carets into the American market and save our fine mill.  The American worker and the local communities will benefit from these new protective trade requirements even thought they are not marketed as “Trade Protection” , as not to upset our foreign trading partners and some anti-American crackpots in DC.  This is a WIN WIN for SP and the American worker – the foreigners now have a safe bet to buy SP and the American workers can now fire up the mill and put money in their pockets and the economy.  The ore & steel cartels have an open door and we Americans can produce iron & steel in our backyards again instead of importing it. Yes- A Win Win for everyone, with 21219 taking the Jack Pot!!!!

  • YourFuture

    AMM has reported that US Steel, ArcelorMittal, Severstal, Essar, Algoma and Steel Dynamica are increasing the price of flat-rolled spot orders by $40 per ton average in an attempt to curtail continuing price declines.

    Two weeks ago hot-rolled had fallen below the break-even point ($600) to as low as $570 per ton – declining from $750 per ton at the beginning of 2012.

    =================================================================

    AMM also confirmed Heidtman’s 254,000 square ft plant closure at SP.  The last shipments are scheduled to leave the facility on Oct. 31

    “The northeast is no longer the manufacturing powerhouse and steel consuming region it once was. Increasingly we are seeing our northeastern customers reposition themselves geographically. Our primary supplier (Sparrows Point) has struggled to maintain a profitable operation for some time and its future is uncertain” said Tim Berra, president of Heidtman.

    A company spokesman said that SP has been running at only 20% of its designed volume.

    The north-east section of the U.S. will now be served from Heidtman’s Cleveland location.

    • TACO

      Looks like PRICE FIXING?  How come they made Mittal sell SP because the DOJ said they were controlling Tin Plate prices by owning too much of the market, but it is OK to  fix hotband? I have NO problem rising prices, but let’s play on an even playing field with Tinplate. Mittal was doing great at SP and making money hand over fist until the Feds put SP into a tailspin.  Something stinks more than our old Koppers Coke Ovens.  Time for the Inspector General to look into this Bullsh!t?????

    • BOF Boy

      Ask Tim why Heidtman really pulled the plug on 21219.  They can import product via CSX, Southern Norfolk, the Interstate via truck, or use the private deep water docks at SP.  Many steel users up and down North Point Road are no longer dependent on the Point as their sole supplier. Tim has another reason he is pulling out and I wish that he would not use veiled wording to place his failures on RG. How low can you go?  

  • Pointworker

    Walter, from what I see and hear things look optimistic but there are always things that could screw it up at the last moment. Let’s hope there is a nice offer and everyone can get back to work!

    • TACO

      Right On Pointworker!  We all have our fingers crossed that something does not come up at the last minute to mess up the deal. Everyone will go back to work, too many interested people working in this direction and too much money involved to have it any other way. The rumor mill is favoring a start up, fingers crossed my brother.  We are 100% behind your prediction and will show them.

    • justthefacts

      Why are you soothsayers so cloak-and-dagger?  If you know actually KNOW something that will ease our worries – share it.  Tell us “What you are seeing?” and “What you are hearing?” Tell us why things are looking optimistic. Are they just your personal apparitions?  Are they just voices in your own head?  Or do they actually have and names and purchase plans? That’s what we want to know – some FACTS.

      • TACO

        Like Pointworker and many others saying it looks good for a start up at the Point because too many people are running around looking will interest at too many things around the Point. These interested people are not apparitions or wishful thinking, just people from out of town looking at the mill. We do not have their names and are not going to make up something just to give you an answer. 

        • Dr Raymond Boothe

          With the reduction in production and the infrastructure bill only good for two years I do not see the possibility of making a profit at SP. The mill possibility cannot turn itself around in that fast a time when the rest of the US steel industry is in a downturn. And if by some magic it did, it would really have to fight the US and foregin mills that have replaced all of SP’s former business.

          With all the problems SP has had in the last few years there is no reputation left to stand on. Yes, there are plenty of buildings on the property, but there is no machinery in them to compete in the markets that might be available in the near future. Even if somebody buys the mill it will take a few years to see any major construction project completed. SP is sheet mill in a country that is flooded with sheet from everywhere in the world. It is the world’s dumping ground for sheet. Right now US companies are attempting to stablize prices on sheet, but are having trouble holding the line.

          It is too bad that SP does not have a billet caster. Then they could make billets for the tubing, structural and forging markets. These could immediately be sent downstream to companies that make piling, structural steel items and possibly special shapes. Sheet is the least required in these markets. SP needs a more varied product line to be successful for anybody, but items like rebar, decking and similar products are going to be captured by mini-mills.

          Remember, with all these people that are visiting the plant, only just a very few are looking at operating it as a complete intergrated mill. They are all looking at the Point from various angles and some are just window shopping. But look for something to happen positive out of all of this. If the mill is broken up into seperate parts, the possibility of retaining some jobs is better than loosing them all.

          As far as keeping L furnace warm, the Court will keep it that way until the current relief money is gone. Then the judge most likely will call in the companies that are putting in a serious bid for the integrated plant. Then a decision will be made if there is a bid that will satisfy the acceptable financial needs of the banks and vendors. If a sale for the integrated plant is not possible, L furnace will be shut down. Then the bidding will proceed in the piecemeal selling off of the plant and equipment.

    • justthefacts

      Wow!  Imagine that, over 2 hours and not a peep out of the Rah, Rah, Rah, Sis, Boom, Bah gang!

      Come on ladies, not even one single source to support your claims?  Not even some plausible conjecture?

      You Sparrow Point (cheer)leaders can’t do better than high-school hallway gossip?

      You should be stripped of your pom-poms!

      Show us the FACTS!  This is the place to do it. We want to believe!

  • Bastards

    Have you all see the “Breaking News” from the Sun papers? RG-Steel wants to pay its top executives 20 million dollars in bonuses while the rest of us loose our house, benefits and jobs.  They couldn’t rub it in our faces anymore than that,  These bastards are the ones that put us into bankruptcy they shouldn’t get a dime.  Just a kick in the ass out the door.!!!!

    • TACO

      Maybe Ira could use his BONUS money to buy a new quiet luxury Helicopter so he does not drive his billionaire neighbors crazy?  The rich get richer and the politicians just give them more grant money and tax relief while they tax us out of our little houses as our paychecks are disappearing! Time for the government to step up to the plate and give every steelworker a golden parachute too. Dr. Boothe  is predicting that when SP opens back up they will cut the mill up into small units and with even smaller paychecks!  Can these press releases get any worse?

  • Pointworker

    None of knows what will happen but the Company who is showing the major interest in the Point looks to be interested in all the steel making departments of the mill and not just the CM as reported by Dr. Boothe. Wish I could give more info but much of the info given to me was in confidence. Let’s hope that when all is said and done a bid will come in and be accepted so that the Brew will have other news to report other than problems with Sparrows Point!

  • Fordtrkfan

    What a shame that RG can even think about giving Top 10 Exec’s that kind of money while they throw 4000 employees out to the street not to mention the other 10000 people that will be strongly affected by the impending closure of the mills. Totally ludicrous!

    To all of  you that are so supportive of the management and owners of SP and other mills, how does that make you feel. Do you think that for one minute that anyone there in upper management cares one bit about any of you that have been kicked to the curb. I know it is not all their fault that the mills may be closing for good, but it sure doesn’t earn any of the hourly or salary smaller management any kind of bonus for being loyal “longtimers”. This just makes me sick to my stomach!

    I am glad the judge disapproved this and I hope that things are closely watched now to make sure that the vendors, and everyone else that is owed money gets theirs before one member of the upper management gets one dime in incentives!

    • Nashorn

      I don’t think the judge has disapproved this, the objection was only raised on Friday by the Trustee.

      Did the judge rule that fast?

      • Fordtrkfan

        Sorry Nashorn, I mispoke during my little rant! I was steaming mad when I read it! I think you are right that it was just objected by the trustee, can’t say that I blame him. I really hope the judge does not allow this to happen!  

        • Nashorn

          No worried Fordtrkfan, steaming mad is an understandable response to this situation.

          I agree that it would be great if the court would reject this plan.

  • SteelDude

    I’m not naming names here, but those who know their steel history will know who I’m talkin’ about.

    Wow now there’s a name from the past, probably one of the most corrupt people to ever work in the steel business.  When I got into the biz 33 years ago I heard that the dude was on the take from oil vendors but figured that talk was bullcrap from a disgruntled supplier.  Soon enough I found that it was true.  My boss got fired over this guy because he accused this guy of being on the take from the scrappies.  Problem is my boss could not prove it and so he got the heave-ho.  In a few short years he eventually got caught though.  Nobody was surprised.  Dude was taking money from everybody.  He then went to another company and shook down vendors again.  Then in a twist of fate one of the vendors he tried to shake down became the president of his company.  First official act of the new boss was to can his ass.

    Then he went to another company, where his career came to an undignified end as the board had him taken out of the building by security officers.

  • John

    Pointworker. Don’t worry you do not owe anyone on this rag an answer or any information. I know it’s hard not to respond to the misinformation posted here by so called experts but just be satisfied in letting things play out and we shall see where the dust settles.

    • Justthefacts

       Not to worry!  The SP cheerleaders got it covered.

      The Walterites were spotted perfecting their moon-walk and spinning “Going Out of Business Sale” sign routines in front of Pizza Romas today.  During the practice session perspective buyers (actually a couple of illegal Panamanian Lawn Care Salesmen) were heard to comment “Sparrows Point has talent!”  Who knew Walter could dance like that!?

      Pointworker is holding another secret top level-meeting with the Men in Black to save Sparrows Point from total alien annihilation.  The whole bankruptcy bit is just a cover, you know.  He could tell you the real story – but then he’d just have to zap you with that flashy thing and you wouldn’t remember anyway.

      And the piece-de-resistance to win over the potential buyers will be Taco in full drag doing his Dusty Springfield rendition of “Wishin’ and hopin’ and thinkin’ and prayin’”.  Guaranteed to bring tears to you eyes!

    • HS

      John, why don’t you get a real job and stop hiding up Dave McCall’s ass. If the Brew is a rag…. Go somewhere else and comment.

      • RAVENS 55

        HS Well put nuf said !!

  • TACO

    Doc I agree that Sparrows is not set up to produce the goods the transportation industry needs, BUT we have many large mill buildings that we can quickly remove the hot roll equipment and simply replace it with the specific finishing machinery
    requested by the vendors to meet their needs. The Point can also run our Hot Mills and New Cold Mill to service vendors using these products. The Point has lot of room to run many different operations at once.

  • TACO

    Yes Fordtrkfan I was up close and the little relief valves on top open with a small clean orange flame for a few minutes and close while another on the other side opens and does the same thing. No steam since about 2:00 AM the morning they took her down to idle. They are just keeping enough on her to protect the linings.
    Heard that the court will not let her go cold as to protect her value for the debtors.
    Maybe Joe Harris can fill us in with more details as he is the BF MAN.

  • Fordtrkfan

    Sorry about my rant! I dont’ usually lose my cool on here, but man I was just burned by the idea of the bonuses! Just gets my goat! I know that all of us are suffering through this tuff time, and to see those that get big numbers anyway were possibly going to get such a bonus when thousands of people are getting laid off just pissed me off!

  • harleyman

    Too bad the bonus’s for the top exec’s are not based on performance.

  • Reality

    Anyone know the status of the Yorkville plant and Martins Ferry? Are they still running? Any layoffs?

    • Guest

      I’m sure Dr Boothe knows their status.

    • Big B

      My husband’s last day was Saturday at Yorkville. He says they have approx. 12 people until the end of this week to finalize things, then it’s curtains for Yorkville as far as he knows. “Everything has to be done by the 14th” he says…..

      • guest

        How does he know that it is curtains for Yorkville?  Where can I buy that cyrstal ball?

      • Reality

         Sorry to hear that. After being a long time employee of Weirton Steel, I was laid off from Weirton Steel within 8 months after they filed bankruptcy. After a period of unemployment,  I was hired down Yorkville under Wheeling-Pitt/Esmark/Severstal. I was laid off from Severstal in early 2009.

        I have fond memories of both Weirton Steel and Yorkville..

      • 11 Mill

        Not true. #11 Mill on 10 turns, both trimmers on 15 turns, Roll Shop on 5, Shipping on 10, 4 scheduled on PA side, 10 cranemen, 4 people at OWS, 6 MTM’s and 6 MTE’s, 1 janitor and 2 in Labor Gang.  Total of 68, number is close.  #11 Mill might work next week, along with Shipping and possibly Trimmers.  Maintenance will increase next week to shut down and preserve equipment. Big B tell hubby to pay a little more attention, he missed it by over 50.

    • guest

       Yorkville has very little people working. Mass layoff this past week. I think Martins Ferry hasn’t been running for quite awhile.

  • Dr Raymond Boothe

    I know one of the major sticking points in the negotiations between Esmark and WCC has been the closing of the Yorkville, Martins Ferry and Beech Bottom Plants. There is bad blood between the two companies anyway. Esmark was insisting that these plants be closed and move Beech Bottom’s coating and painting lines to another of Esmark’s plants. Basically Esmark wants WCC’s patents product lines and especially their name. They are one of the most recognized names in their field.
    However, there are other companies who want all of WPSC. If they get their waythese companies will buy everything and work them all as one unified company.

    Very few people are working at Yorkville, Martins Ferry and Beech Bottom. They are completing the last of their orders and closing things down. Most of it involves mothballing equipment and doing prevenative maintenance.Eventually there will be a group of maintence workers, security guards, a few office workers and the company’s EPA compliance team. 

    There have been inquires about these plants individually as well as in groups. It will all depend on what the minimum price the judge has set on these properties. That is unknown.

    • Pointworker

      Dr Boothe, i do hope that the Wheeling group stays together and is purchased by a Company that keeps it that way!

    • #11 Mill

      You are wrong, Doctor. You have bad info again!

  • Pointworker

    Correct Guest, nothing is written in stone as of yet regarding the closures.

    • Walter

      You are right again Pointworker because notice how quiet the leadership is. The new buyer cannot take over SP without an agreeable workforce to run it. So I bet that the leadership is working on the details to make this happen with terms that everyone can live with. Times are bad everywhere, we just need to sweeten the pie for those tire-kickers interested in keeping the integrated mill at Sparrows Point. The buyers need all of us as much as we need them, so let’s all agree to work together to make it happen.

  • Mickey 111

    all  any one knows…what  if  …but  but  …maybe  maybe..could  be…domesday…a  start up…but  but  …what  if   …ect   ect

  • Dr Raymond Boothe

    More visitors have been reported the last few days at the Follansbee Coke Plant. Actually there has been more visitors than I even expected. These are a combination of steel and utility companies.No recent news at Mingo.

    • Walter

      Dr. Boothe, This is very good news and shows that while steel/finishing sides are apples and oranges with the Coke Plant, it proves what we have all been saying — There are a lot of interested visitors with deep pockets looking for the deal of the lifetime.  Their good deals are going to make them money and put many folks back to work again, Both here in 21219, as well as in the Ohio Valley.

      Dr. Boothe, I am starting to believe most of what you say because over time your facts all check out on target even if it is not what we at Sparrows Point want to hear.

      I do think that someone, maybe a concerned serious buyer candidate, or as many say, the Judge is keeping the L Furnace heat on her and this is costing much money and energy that should be put towards making iron and not just sitting there spinning her wheels.  We are a third of the way into July and she has not gone cold as many of SP’s detractors and bitter competitors are wishing for or told us would happen by now.  

      Strange how the good news is played down and the bad news gets the limelight! Someone is behind all this negative news just to lower the mill’s value so that they can get a lower price?  I believe that the real industry insiders can see past this so the bidding for SP is going to be spirited and the selling price perhaps higher than expected?

    • msc#4operator

      hopefully these visitors such as sun coke dont fall for severstal’s woe is me tactic….severstal trying to scare off the competition from bidding by making msc look like a money pit…..severstal wants to get rg;s half for pennies on the dollar…..sick of these billionaire owners!!

      • Walter

        Yes msc#4operator, They are pulling the same worthless money pit with us at Sparrows Point by saying the Point is not even worth its weight in scrap when you figure in all the employee benefits and EPA legacy costs. No not worry, we know that this negative nonsense is just to get the prices down as low as possible. Too much interest in the mills for them to be worthless!  

  • BeenThere2020

    This should get interesting, what will the usw do now that another steel mill company wants to slash wages.

    USW, ArcelorMitall Start Contract Talks for 14,000

    MORGANTOWN, W.Va. (AP) –
    United Steelworkers and ArcelorMittal have begun negotiations on new contract.    The current agreement which expires Sept. 1 covers 14,000 employees at 15 facilities in Pennsylvania, West Virginia, Ohio, Illinois, Indiana, Minnesota, Louisiana and South Carolina. The discussions began Monday in Pittsburgh.    ArcelorMittal, which is based in Luxembourg, wants to slash wages and benefits by more than $28 per hour.  They would also like to have the unilateral right to cut wages during business slowdowns.    It also proposes redesigning incentives, freezing pensions, and eliminating retiree health care and pension benefits for workers hired after Sept. 1.    ArcelorMittal says it’s committed to a fair agreement that creates a sustainable future, but it must close the labor cost gap with nonunion mills..

    • Reality

       Just another step towards my theory of a Global Wage of $10/hr.

    • YourFuture

      The soothsayers are happily picnicking on the shore line and are saying “Relax, it’s just a little rain cloud. Been here 40 years, it happens all the time”.

      What they don’t realize is than following behind this little dark cloud rages the storm of the century!

      There have always been, and probably always will be, those who can’t read the writing on the wall.  That’s why there are “victims”.

      The information provided by Justthefacts and Reality is clue #1.

      The information provided by you (BeenThere2020) is clue #2.

      A 3rd clue is the European steel closures being planned due to falling demand globally.

      You can read meore here: http://www.4-traders.com/ARCELORMITTAL-6333/news/Fitch-More-Steel-Capacity-Closures-Likely-Across-Europe-14407640/

      But clues are useless for the clueless.

      You can show them “See this puzzle piece fits here, and this puzzle piece goes there” but they’ll never see that together the pieces make a picture.

    • guest111

      Well… Guess I need to remind you; we all already 3 bux behind the industry and our ‘contract’ already has the cutrate wage for “newhires’ as if that is gonna happen. Also, there have been several posts on this site from nonunion guys bragging they make over 100g. I dont know alot of people that make that much here. If they do they live in the mill.    

  • Common and Economic Sense

    SMARTEST-MOST KNOWLEDGABLE on this site

        1.Dr. Boothe
        2. Steel Dude
        3. YourFuture

    These gentleman make the most common/economic sense and are the most knowledable
    about the Iron and Steel industry. 

    Please, everyone take off your blinders and read ALL of their posts.  There’s no B.S., no
    window dressing or spin.  Just the facts.

    Do yourselves a favor and re-read it from the “smartest guys in the room”.

    • appalledinohio

      i can agree with your picks but i give H.M.Guru a lot of props as he is just as smart, a little more wily, and actually has some workable ideas. I really like his plan of employee ownership. Then if we go down we have none to blame but ourselves. None of us are multi-billionaires so i don’t see the greed factor coming into play. The greed factor is what i believe to have brought this company down in the first place.

      • Hot Metal Guru ( Jack Rose )

         Thanks so much for the ego boost this Thursday morning Appalled ! Perhaps sometime we should do lunch and converse ? Back to what matters, however. An ESOP for these mills could be a wonderful thing for all of the employees that are affected by the complete lack of managerial prowess and skill displayed by Goodwin’s demo crew ! Not to mention the headline grabbing attention it would receive. I can recall vividly, the national interest that was generated when Weirton Steel opted for a path less traveled back in the mid eighties.The main obstacles that I see that would confront such an endeavor now are the obvious time constraints and the inability to organize effectively. From a strictly marketing standpoint, it would be a complete boon ! The American consumer loves an underdog story and there is no substitute for a high quality, American manufactured product ! Again, key word here is high quality. Does not and should not be inexpensive.That is what separates American manufacturers from cheap, mass produced, imported junk ! Musicians the world over would think nothing of plunking down 4 grand for a Gibson Les Paul and would conversely walk right past a cheap knockoff of the same instrument imported from Korea or Indonesia. I absolutely agree with you that it would work.We would need to move fast however if this is something that could possibly come to fruition. There were a few posters on here a month or so ago that were part of the Weirton ESOP and they had some very esoteric knowledge that they were willing to share.Are you fellas still out there? Doc Boothe, what are your thoughts on this? Is it possible ?  This would be invaluable if a feat such as an ESOP for our affected mills could actually occur?

        • Nashorn

          I remember those ESOP posts

          From the posters’ experience, and my own as a lender, the key flaw in an ESOP is timing, ESOPs take time, a year or more, to put together. You have to find a management team, and more importantly, someone to lend the ESOP money to buy the plants. The bankruptcy court has dates next month to resolve this issue and won’t wait. Your plants don’t have that much time.I can also tell you that a key flaw with most ESOPs is that they only supply a fixed amount of capital. In a loss-making business or a depressed market, the ESOP just doesn’t have a way of raising more money.I recall that the poster said the Weirton ESOP itself went out of business after a few years.Forget about it, it’s a pipe-dream.

          • Reality

             Weirton lasted about 21 years under an ESOP.
            But, I agree about the pipe-dream.  Seems like a lot of people around here are grasping at straws.

  • Nashorn

    Bankruptcy Judge allows Environmentalists’ lawsuit appeal to go forward

    From Tuesday, the bankruptcy judge overseeing the RG Steel bankruptcy allows the Chesapeake Bay Foundation to continue to press its appeal of RG Steel’s environmental settlement.

    This will result in increased uncertainty about what RG’s environmental liabilities really are.

    Read below from The Daily Record

    http://thedailyrecord.com/2012/07/10/environmental-appeal-involving-rg-steel-to-proceed/

  • unbelievable

    Does anyone know what happened in this case against Ira Rennert? Sounds familiar!
    http://www.minesandcommunities.org

  • YourFuture

    AMM reported today that AK Steel and Air Products have abandoned their Middletown blast furnace waste gas converter project, which received EPA praise and a $30 million grant from the Dept of Energy, and which would have produced 1,000,000 mega-watt-hours of electricity in its first year of operation, due to projected electrical costs not justifying project completion expenditures.

    It was originally hoped that blast furnace waste gas conversion would be a new source of green energy allowing steel makers to compete with solar power and wind farm developers.

    AK Steel had anticipated using this resource to reduce operating coast while  selling renewable energy credits to the state’s electric utilities.

    ArcelorMittal had been following this project’s progress with similar interests.

  • Walter

    Do not believe what some crackpot Greenie from the Banana Republic is posting.
    I have seen with my very own eyes and nose that as far as the big steel operation in Sparrows Point, Maryland is concerned, RG’s Mr .Ira turned around 100 year’s of “is OK to pollute at SP” to its NOT OK to pollute the air and waters of the Chesapeake Bay!  Cannot speak for Peru, but Rennert stopped the practice of 100 years of unrestricted polluting at SP the day he purchased the mill. Say what you will about his Wall Street dealings, but in Maryland, USA he set a lot of folks straight that you must operate my mill in an environmentally responsible manner.
    Rennert’s legacy at the Point is a two edged sword – one of the mill’s sadly uncertain future, and the other that he and his family ordered that the unchecked pollution to stop and those that would pollute held accountable. This should make Mr. 21219 Property Taxpayer feel a little better to understand that everyone who supports iron making is not out to destroy his ducks and frogs.

  • YourFuture

     AMM reports that

    =============================================================

    Despite strong sales Indiana Steel & Tube, with a gross revenue of $40 million in 2011, filed for Chapter 11. They are slated to receive $8.5 million in debtor-in-possession financing.

    Early this year their senior management had decided – unsuccessfully – to liquidate some of their inventory to increase working capital.

    =============================================================

    The $100 billion 27 month transportation bill signed by President Obama includes money for harbor maintenance (dredging). While the federal tax on shipped imports, established in 1986, created a $6.2 billion surplus it has not been utilized for U.S. port needs, resulting in inefficiencies for heavy product importers, such as steel.
     

  • YourFuture

    With regard to Walter’s comments on Ira’s environmental responsibility …For more than 80 years Bethlehem Steel was notorious for violating air, waterand toxic waste regulations on the 2300 acre peninsula known as Sparrows Point.The problem escalated to the point where both the EPA and the MD Dept ofthe Environment eventually sued Bethlehem Steel.  This culminated in a 1997 consent decree requiring Bethlehem Steel *ANDANY SUBSEQUENT OWNER* to correct these violations and to completestudies defining toxins that had migrated offsite.Neither the evaluation or clean-up was completed by ISG or Mittal.Severstal, for all it’s faults, did actually install a few skimmer pumps that remove about 10 gallons of the estimated 10,000 gallons of light oil floating on the water table, each day.Severstal also starting drilling injection wells to help clean up benzene and investigated bioremediation of naphthalene and coal tar along the waterfront.Ira could have continued and improved upon these efforts, but he didn’t.As agreed to in the terms of purchase Ira has been, and remains, legally liable and accountable for the Sparrows Point clean-up.This is a serious investment that requires a level of social commitment and responsibility that goes far beyond simple-minded praise of Ira and his goons threatening that “oil spilled on the floor will result in termination”.

  • MIKEVISNIC

     STUPID YOU ARE, AS ARE MOST STEEL ENGINEERS!!! I NO LONGER WORK IN THE STEEL INDUSTRY, BUT I HAVE THE GREATEST MEMORIES OF THE FINE MEN I WORKED WITH. WHO  THE —– ARE YOU? ARE YOU NO MORE THAN A TITLE? MOST LIKELY, YOU COULD NOT POUND A NAIL IN DIRT. DO NOT GIVE UP MY BROTHERS, JUST REMEMBER THE EXPERTS ONCE PRINTED DEWEY BEATS TRUMAN.

    • CONFUSIUS-SAY

       CONFUSIUS SAY: “MAN WHO POUND NAIL IN DIRT IS IDIOT”

  • Nashorn

    Steeldude,

    My point was that there is no time to pull together an ESOP, no management team and no money.

  • 1375Proud

    Our powerhouse has three boilers with multi-fuel capabilities. Natural gas, coke gas, blast furnace gas and one boiler has pulverized coal option (hadn’t used coal for a while). Only ran one or two boilers with one to jump to, depending on demand and maintenance. Four stove operation had priority for blast gas supply. 56 inch supply main to stoves regulated to 60 inches/presssure. Stoves have natural gas to supplement (rarely used). Depending on operations and natural gas/oxygen  enrichment on the furnace,… stoves and boilers can run on only blast gas,… while providing plant steam, furnace wind, 7.5 and 3 meg generators (10 meg available when furnace pulls wind off the furnace). Very efficient when balanced.

  • 1375Proud

    We had looked supposedly looked into a co-generaton plant addition to use our excess steam.  Our electrical generation is not for surplus into the grid, but if we break away from Ohio Edison for any reason, we have the ability to bring the plant down safely.

  • appalledinohio

    I heard this morning there is a 5 team consortium that has entered a viable bid. Don’t know which plants or the # of plants they bid on. I was told their interest is high. 

    • Hot Metal Guru ( Jack Rose )

       Thanks for the update old buddy ! Positive news for our working people is what matters most !

      • appalledinohio

        Thats for sure Bass. Thats why i chose to pass this one along. I,ve been hearing this story for the past 3 weeks. Yesterday i heard it from a reliable source so  i posted it in hopes of raising spirits. Lets hope it’s factual and that 1190 is included!

    • Pointworker

      I know there is much interest in the Point for sure and I hope that there is as much interest in the western plants as well.

    • Walter

      Of course SP has to be at the top of the list. I have no idea what other plants may be in consideration – Good Luck to to all of the other plants!

      • Guest

        What would Walter do if this “bidder” is only going after Warren or Wheeling. Would it be that big of a shocker???

        • TACO

          Some of the outside contractors are being quizzed about Sparrows and the buzz seems to be very positive that someone wants to keep the plant operating as usual.
          The buyers need the outside companies too and we all forgot about them. Cannot run SP without them, Guess we got too big to do it all in house? So this looks real good that the buyers like the outside contractors and can work with them, so this means that the offer is going to come real soon that the plant is going back to work?  Will the first offer be considered a Straw Horse offer and set the sale back another 2 or 3 weeks?  Everyday that Sparrows is down is costing millions of wasted dollars, They have to move faster to get the Point back to full output.

          • Chris_herren09

            If this HAPPENS and ONLY if this HAPPENS THEY will be asking us to work for $15 an hour  and PAY a HELL OF ALOT MORE for BENFITS  JUST GIVE GIVE GIVE YOU will see it will be total BS  and the union will not do JACK SHIT to help cuz Taco THEY DO NOT CARE AT ALL  They will say we did our best and your LUCKY TO HAVE A JOB  Its OVER the good old days are GONE sorry but its true Taco bell would be a Better job than this  OH and as allway 9477  is a POS

          • Reality

             Please let me know which Taco Bell pays more than $15/hr with the option for benefits because I will apply for a job there tomorrow.

    • Justhefacts

      While, as Jack says, we all need “positive news”, we don’t need more unsubstantiated rumors.

      Care to put some meat on the bones of hope you’re throwing us?  Or is this just babbling after inhaling too much of Walter’s purple smoke and seeing a vision in his crystal ball? 

      What is FACTually happening is … apart from the small band of hourly fire watch personnel, only upper level mill supervision have been retained. Currently, their ONLY function is to “invent” a game plan to run the place with an absolutely minimum number of full-time workers. I use the word “invent” because what Goodbar is demanding is about about 30% below our already anemic numbers.

      Just why this task is such an imperative I can’t say because I don’t FACTually know.  But a friend of my second cousin’s brother-in-law’s barber overheard in the local bar that …

      • Lmfao

        a friend of my third cousin told his brother in laws brother that his second cousins 1st cousin heard from his uncle that his cousin said that his barber said , how would you like your hair cut today.

      • appalledinohio

        Thanx Facts. I guess i deserve the abuse. Matter of fact i like the abuse. I’m used to it after working for these jokers for 34+ years.
        A couple of fellow works who heard this from different sources told me so. The rumor mill is alight with these speculations, however, i firmly trust the one source who told me this. Me being old school, don’t trust the word of many!
        Lets hope this gentlemans story is true and we all get back to work soon. I guess we’ll find out for sure in another 5 weeks. 

    • TACO

      Just as the buyers inspect the mills, they also need to get a handle on the outside contractors that provide the mill’s services. Some of the outsides say that the questions are positive leaning in context, Looks like some of the plants are going to make it out of this mess with the question being when will production resume and who will the new owner be? Interest is very high at the Point too. I think that the union has good news too but are under a gag order not to upset the negotiations, 

  • Ohio Steelworker

    Does anyone know if any bids have been made on any of the mills?

    • 11 Mill

      No one will know until the 25th, when bids are due.  No reason for a company to put the bid in early.

      • Lmfao

        SILENCE! The Great Walter of OZ knows all!  Return to Sparrows Point with the broom of the wicked witch of the Hamptons and he will return you to work.
        Just follow the Yellow Brick Road

  • 1190

    fritz! is that you?

  • YourFuture

    SeekingAlpha is reporting that AK Steel could be following in RG Steel’s footsteps by losing money 8 out of the last 10 years, and carrying a $1.87 billion pension and other retirement liability.

    http://seekingalpha.com/article/720041-ak-steel-a-challenged-firm-in-a-troubled-industry?source=yahoo

  • wciheycraneman
    • Pointworker

      An old article that was first printed weeks ago.

    • Nashorn

      This is old news , from June 18, and was already posted.

      • wciheycraneman

        Mia Culpa, it was posted on the NASDAQ report as July 16 but was originally written by Peg Brickley June 16th.  Sorry

    • guest

      That’s old news.

  • BOF Boy

    Looks like something is in the works, cleaning the Coke ash from the L and Maryland Pig loading their stockpiles to make room for when the L starts back up.  50 ’50 we will be back up?

  • Mickey 111

    well   …the  contractors  and  vendors  been  ripping  off  the  stell  mill  for  a  long   long  time….cant  prove  nothing…but   a  lot  of  kick  backs  were  in  play….

  • CONFUCIOUSSAY
  • Dr Raymond Boothe

    For all reasonable expectations, I do not even see a 50/50 chance of Sparrows Point ever operating as an integrated mill again. I believe this last disaster killed any chance of that ever happening. The main reason is the tremendous debt, mostly generated by operating Sparrows Point. This debt lies heavily on Sparrows Point and how that debt is dealt with.

    I do believe that Sparrows Point has a very good chance developing into a “Metals Park,” or “Metals Campus.” There is a very good cold mill there, along with a tinning and coating facility. If good salesmen can come in and develop a good business plan then other metals companies might join in. There are many unused facilities on the Point that can attract other metals industries. One would be a good special shapes company like McDonald Steel. Another would be a custom structural steel and pipe distributor. In any case, there are many steel related industries that could be attacted. Manufacturing sheet steel just isn’t one of them. This “Campus” also could contain fabricating, warehousing and housing units as well. There are more positives that negatives involved, but everybody is going to have to look beyond the envelope.

    And in that envelope expansion look for the end of L furnace and the hot end. This will eventually happen no matter what. Technology will soon end that technology and evolve.
    It is too expensive to run and cannot produce iron economically for Sparrows Point.The ghostly mistakes of Bethlehem Steel in the past have finally come to haunt the Point. It will also haunt the environment for many more years.

    Let it be folks and let it evolve into the 21st century.

  • Mickey 111

    we  can…sp  can  make  plenty  of  steel…cheap…the  proublen  is  that  you  all  dont  see  is  that  we  need  contracts  to  all  of  it  ..not  just  1/2 for  a  yr  or  2…or  whatever…..we  need  to  run  all  out  n  sell  it  all  with  long  tern  contracts…all  of  the  steel  econame  is  still  low….still  a  lot  of  inports   hurting  us….obama…a
    n  congerss  need  to  get  off  there  ass  n  do  something….but   they  wont…their  money  is  all  invested  in  overseas   steel  mills….ect…..

  • OxygenMaskedMan

    Looks like Sparrows Point is still laying some Golden Eggs, or is it our imagination? Seems like there are lots of outside dump trucks running around Sparrows Point after dark and on weekend evenings, maybe they are just supplying the French owned cement plant, still its odd the truckers are so willing to work night weekends and miss staying home with Mom and the kids?  

    With no one watching the candy store, other than a rent a cop or two, maybe someone in the know can make a little spare change and then send it to the judge in Delaware so that he can fairly distribute it to the vendors and lenders. Why all the activity late at night or on weekends? With the mill down is someone still working to find a little gold at the Point to pass along to the needy?  Do the creditors or judge have a clew who has the key to the front gate? I am sure all proceeds are going to help out the investors and steelworkers in need? What do you think?

    • ManyAffectedByThePoint

      I live in the are and trucks have been going in and out for about a week, especially this past Sunday.  They go in loaded and come out empty.  You can tell because the dumps are covered going in and not coming out.  Plus, you can tell by the weight on the wheels.  Does anyone know what could be going down there?  I see them going over the viaduct and headed towards the main office.

  • Walter

    Hi Warpig, when you listen to both sides, the positive side is tipping the scale towards the big international steel boys buying the Point and the Port’s hopes slip sliding into the Patcrapsco River. Too much pressure to keep the primary side running and much wheeling and dealing in favor of big steel remaining at the Point. There is no chance that the hot side will not be back up! When,my guess is as good as yours, but at least iron making is here to stay for awhile!  Add to this Dr. Boothe’s news that new technology is headed to the Sparrows Point Campus and the future for big steel at SP looks darn good!  Even the Greenies will be happy with the proposed wind and solar projects!  If they want to put me in charge of the Windmill Department I will be more than happy to run it for them.

    Dr. Walter    Phd. BS

  • JustTheFacts

    Windmills!  Couldn’t have said it better myself, Walter. You are without doubt the Don Quixote of Sparrows Point …

    And don’t forget to tell everyone that your princess Ira Dulcinia will insist the $20 million executive bonus be shared equally ($5,000) each among the 4,000 workers who struggled to keep the farce called RG Steel afloat.

    Tell’em you’ve seen Goodbar mounting Rocinante with a bagful of checks that he’ll be personally delivering to each and every one of us!

    Your moronic ramblings are nothing more than totally unfounded conjecture, devoid of anything even remotely associated with a verifiable statement.

    The “big International steel boys” buying SP?   You really must be Dr. Bu||$|-|IT, ’cause you can’t be reading any of the local or foreign steel investment or trade magazines.

    Who are these “big boys”?  And who’s “putting pressure” on who to run steel side?

    How about some names, Walter Quixote?

    I challenge you to post just a single link to any verifiable article that even remotely to alludes to your claims, otherwise you’re http://www.youtube.com/watch?v=_W42rMjYWlk

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  • March 24, 2014

    • Last Thursday, I sent an email to the Mayor’s Office of Communications asking for some basic responsiveness: Please return our emailed queries and phone calls about stories. Please send us the same routine emails you send to other members of the media. Lately, more so than usual, they haven’t been. It’s a shame because, even [...]

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